Andrew Kang blasts Wall Street analysts: Tom Lee's bullish reason for ETH is "extremely stupid"

Renowned encryption investor Andrew Kang recently published a lengthy article, directly pointing out that Wall Street analyst Tom Lee's bullish argument on Ethereum “lacks basic financial knowledge.” Kang refuted Lee's five major points one by one, sparking heated discussions in the crypto community. Some netizens even brought up Kang's prediction from April this year that ETH would fall below 1,000 USD, questioning his judgment. This article delves into the market logic behind this showdown of experts.

Five Major Controversies: How Kang Breaks Down Tom Lee's Ethereum Bullish Argument

Andrew Kang posted on social media that Tom Lee's analysis of Ethereum is the “dumbest viewpoint from a well-known analyst” he has seen recently. He systematically criticized Lee's five bullish reasons:

1. Do stablecoins and real-world asset tokenization (RWA) drive demand? The data says no

(Source: X)

Kang pointed out that Lee's first argument states that the growth of stablecoins and tokenized assets will drive ETH trading volume and fee income, but this completely ignores the actual data: “Since 2020, the total value of tokenized assets and the transaction volume of stablecoins have grown 100 to 1000 times, but the daily fee level of ETH has remained basically the same as in 2020.”

Kang explains the reasons for this phenomenon include:

· The Ethereum network upgrade has improved transaction efficiency.

· Stablecoin and tokenized asset activities are shifting towards other competing public chains.

· Low liquidity assets have a low trading frequency after tokenization, resulting in negligible transaction fees.

“You can tokenize assets worth trillions of dollars, but if these assets are not actively traded, then perhaps it can only add a hundred thousand dollars in value to Ethereum.” Kang bluntly stated that in the race for blockchainizing traditional financial transactions, Solana, Arbitrum, and Tempo have already taken the lead.

2. The narrative of “digital oil” is actually bearish

Regarding Lee's view of comparing ETH to “digital oil,” Kang believes this is actually a bearish signal:

“Oil is a commodity, and the real oil prices adjusted for inflation have fluctuated within the same range for over a century, occasionally experiencing price spikes, but ultimately they will fall back. I agree that ETH can be considered a commodity, but this is not necessarily a positive outlook.”

3. The assumption of institutional staking of ETH lacks a realistic basis

Kang questioned Lee about the prediction that financial institutions would buy and stake large amounts of ETH: “Have large banks and other financial institutions included ETH on their balance sheets? No. Have any of them announced plans to do so? Neither.”

He rebutted with a vivid analogy: “Would banks stockpile large amounts of gasoline just because they continuously pay energy costs? No, because it doesn't matter; they only pay for it when needed. Would banks buy stocks of the asset custodians they use? No.”

4. Is the value of ETH equivalent to the sum of all financial infrastructure companies? “Pure delusion”

(Source: X)

Regarding Lee's belief that the value of ETH should be equivalent to the total of all financial infrastructure companies, Kang responded directly with “pure delusion,” arguing that this is a “fundamental misunderstanding of the value accumulation mechanism.”

5. Technical analysis is misused to support biases

(Source: Bloomberg)

Kang stated that he is a supporter of technical analysis, but he believes that Lee “seems to use technical analysis to draw random lines to support his bias”: “The most objective conclusion is that Ethereum is in a multi-year consolidation range, which is quite similar to the trend of crude oil prices. Currently, Ethereum is not only in a consolidation range, but has also recently touched the upper end of the range without breaking through resistance. From a technical perspective, Ethereum's trend is actually bearish.”

Community Reaction: Is Kang's Criticism Justified?

Kang's lengthy post has sparked heated discussions on social media, with many netizens questioning his viewpoints. Some have dug up Kang's prediction from April this year that ETH would fall below 1000 USD, questioning his judgment.

Some netizens pointed out that Kang's understanding of the Ethereum ecosystem may be flawed, especially regarding the potential value that Layer 2 solutions and technical upgrades like EIP-4844 bring to Ethereum.

The Core Controversy of Ethereum Valuation: Cognitive Gap or Insufficient Fundamentals?

Kang presented a key point at the end of the article: “The valuation of Ethereum primarily stems from the market's insufficient financial understanding. Objectively speaking, this cognitive gap can indeed create considerable market value, just look at XRP. However, the valuation supported by cognitive deficiencies will eventually have an upper limit.”

He believes that the current loose macro liquidity environment temporarily maintains the price level of ETH, but unless a structural change occurs, Ethereum “is likely to fall into a prolonged slump.”

The core of this debate is: how should the value of Ethereum be assessed? Is it based on its potential as a global financial infrastructure, or merely its practicality as a medium of exchange? As institutional investors continue to enter the encryption market, the answer to this question will have far-reaching implications for the entire industry.